BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public...

25
BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 RESPONSIVE TESTIMONY OF MICHAEL C. DEEN ON BEHALF OF THE INDUSTRIAL CUSTOMERS OF NORTHWEST UTILITIES REDACTED VERSION June 4, 2013 In the Matter of PACIFICORP 2014 Transition Adjustment Mechanism ________________________________ ) ) ) ) ) )

Transcript of BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public...

Page 1: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

BEFORE THE OREGON PUBLIC UTILITY COMMISSION

UE 264

RESPONSIVE TESTIMONY OF MICHAEL C. DEEN

ON BEHALF OF

THE INDUSTRIAL CUSTOMERS OF NORTHWEST UTILITIES

REDACTED VERSION

June 4, 2013

In the Matter of PACIFICORP 2014 Transition Adjustment Mechanism ________________________________

) ) ) ) ) )

Page 2: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/1

I. INTRODUCTION AND SUMMARY 1

Q. PLEASE STATE YOUR NAME AND BUSINESS ADDRESS. 2

A. My name is Michael C. Deen, and my business address is 900 Washington Street, Suite 3

780, Vancouver, Washington 98660. I am employed by Regulatory and Cogeneration 4

Services, Inc., a utility rate and consulting firm. 5

Q. PLEASE DESCRIBE YOUR BACKGROUND AND EXPERIENCE. 6

A. I have been involved in the energy industry for over 6 years. During that time, I have 7

served as an analyst and expert on a variety of power supply, cost, ratemaking, and policy 8

topics—primarily regarding the Bonneville Power Administration and Pacific Northwest 9

utilities. I have provided testimony on behalf of the Industrial Customers of the 10

Northwest Utilities (“ICNU”) before the Oregon Public Utility Commission (the 11

“Commission” or “OPUC”) in various proceedings regarding Portland General Electric 12

Company and PacifiCorp (the “Company”). I have also provided testimony on behalf of 13

ICNU before the Washington Utilities and Transportation Commission (“WUTC”) 14

regarding Avista, PacifiCorp, and Puget Sound Energy. I have also provided testimony 15

on natural gas matters regarding Northwest Natural before the OPUC and regarding 16

Avista and Puget Sound Energy on behalf of the Northwest Industrial Gas Users before 17

the WUTC. A further description of my educational background and work experience 18

can be found in Exhibit ICNU/101. 19

Q. ON WHOSE BEHALF ARE YOU APPEARING IN THIS PROCEEDING? 20

A. I am testifying on behalf of ICNU. ICNU is a non-profit trade association whose 21

members are large industrial consumers of electricity throughout the Pacific Northwest, 22

including customers served by PacifiCorp in Oregon. 23

Page 3: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/2

Q. WHAT IS THE PURPOSE OF THIS TESTIMONY? 1

A. The purpose of this testimony is to address PacifiCorp’s proposed levels of net power 2

costs (“NPC”) included in the 2014 Transition Adjustment Mechanism (“TAM”) 3

proposed rates. The TAM is PacifiCorp’s annual filing to update the level of NPC in 4

rates and set transition adjustments for direct access customers. 5

The Company’s initial filing in this case is for NPC of approximately $1.457 6

billion on a Company-wide basis for 2014, with an Oregon allocation of $363.1 million. 7

The Company’s 2013 TAM filing included system NPC of $1.473 billion and an Oregon 8

allocation of $362.7 million. Factoring in Oregon’s change in load from the last 9

proceeding, this change represents an approximate $1 million decrease to Oregon rates. 10

Q. PLEASE BRIEFLY SUMMARIZE YOUR RECOMMENDATIONS IN THIS 11 PROCEEDING 12

A. ICNU recommends the following adjustments to the Company’s NPC: 13

• Jim Bridger Heat Rate Improvement. The Company has made a significant capital 14 investment to upgrade to the functionality of Jim Bridger Unit 2. Although the 15 Company has reflected the increased generation capacity as a result of this upgrade, it 16 has not included the increased efficiency of the unit. In 2010, the Company made a 17 similar upgrade to Jim Bridger Unit 1 and has inappropriately used data from prior to 18 that upgrade in determining the heat rate of the unit for 2014. Correcting both of 19 these heat rates results in a reduction of the Oregon revenue requirement by 20 approximately $1.2 million. 21

• Coal Fuel Expense. Oregon rules allow consumers to receive the benefit of “lesser 22

of” cost or market pricing for transactions with utility affiliate suppliers. Moving the 23 price of the Jim Bridger plant coal supply to a market price reduces the Oregon 24 revenue requirement by approximately $7.4 million. 25

• Wind Energy Shaping. The Company has inappropriately proposed to reshape the 26

hourly output of wind resources in GRID based on one year of historical data. 27 Removing this change reduces the Oregon revenue requirement by approximately 28 $1.2 million. 29

Page 4: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/3

Q. HAVE YOU CONDUCTED A STUDY INCORPORATING ALL OF YOUR 1 PROPOSED ADJUSTMENTS? 2

A. Yes. Incorporating all of ICNU’s proposed adjustments reduces the overall revenue 3

requirement by approximately $9.4 million on an Oregon basis. 4

II. JIM BRIDGER HEAT RATE IMPROVEMENT 5

Q. WHAT CAPITAL IMPROVEMENTS FOR JIM BRIDGER UNIT 2 IS THE 6 COMPANY PURSUING RECOVERY FOR IN ITS CONCURRENT GENERAL 7 RATE CASE? 8

A. The Company is seeking cost recovery for a turbine upgrade project at Unit 2 of the Jim 9

Bridger facility. The estimated cost of the project on a total Company basis is $31 10

million. The primary benefits of the project are an increase in generating capacity of 12 11

megawatts (“MW”) with no additional fuel requirement at maximum output. The 12

Company also anticipates that there will be an efficiency improvement of approximately 13

500 BTU/kWh over the normal operating range of the plant. The project was anticipated 14

to start service in May of 2013. Full description of the upgrade project and its costs and 15

benefits can be found in Exhibit PAC/400 in Docket UE 264, the testimony of Dana 16

Ralston in PacifiCorp’s concurrent general rate case filing. 17

Q. HAS THE COMPANY INCLUDED BOTH THE CAPACITY AND EFFICIENCY 18 IMPROVEMENTS FROM THE TURBINE UPGRADE PROJECT IN THIS 19 PROCEEDING? 20

A. No. The Company has not included the anticipated efficiency improvements in its power 21

cost modeling in this case. 22

Q. IS THIS APPROPRIATE? 23

A. No. Not including the full benefits of a project while charging customers its full costs is 24

a basic violation of the matching principle. If the Company wishes to seek recovery for 25

the turbine upgrade at Bridger Unit 2, it must include all benefits. 26

Page 5: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/4

Q. ARE THE EFFICIENCY BENEFITS FROM THE TURBINE UPGRADE 1 PROJECT REASONABLY KNOWN AND LIKELY TO OCCUR? 2

A. Yes. In ICNU Data Request 2.3 in the UE 263 docket, ICNU requested the Company 3

provide the basis for the expected 500 BTU/kWh heat rate improvement. This data 4

response is attached as Exhibit ICNU/102. As part of this response, the Company 5

provided the results of a study performed for the turbine upgrade project completed on 6

Bridger Unit 1. The Company presumably deemed this responsive as “Bridger Units 1 7

and 2 are of similar design, capacity and size.” 8

Additionally, in response to ICNU Data Request 2.1 in UE 263, the Company 9

confidentially provided “a summary of the economic analysis for the project as well as 10

the project documentation used in the approval process.” ICNU/102, Deen/1. Page four 11

of this documentation cites the Company’s expectation for a net heat rate improvement of 12

BTU/kWh. Confidential ICNU/102, Deen/2. 13

Q. DID THE UPGRADES AT BRIDGER UNIT 1 PRODUCE SUBSTANTIAL, 14 MEASURABLE AND IMMEDIATE IMPROVEMENTS IN THE UNIT’S HEAT 15 RATE? 16

A. Yes. Based on my analysis of Bridger Unit 1 operations from the 48 month period ended 17

June 2012, the unit showed a substantial improvement in average heat rate for the 24 18

month period during which the turbine upgrade was in effect. Specifically, prior to May 19

2010 the average heat rate for Unit 1 was BTU/kWh. From July 2010 (the first 20

full month after the upgrade) through June 2012 the average heat rate was 21

BTU/kWh. This represents an improvement of BTU/kWh. 22

Page 6: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/5

Q. WHAT HEAT RATE DO YOU RECOMMEND BE USED FOR THE BRIDGER 2 1 UNIT FOR 2014. 2

A. I recommend that the average heat rate for Bridger Unit 1 since the time of the turbine 3

upgrade be imputed for Unit 2 for power cost modeling purposes for 2014. This value is 4

BTU/kWh and represents an improvement of BTU/kWh over the value of 5

BTU/kWh currently included in the GRID model for Unit 2. This represents a 6

reasonable value in line with the Company’s testimony of the expected efficiency 7

improvement, and is also reasonable given the empirical results experienced for Unit 1 8

and the similarity between Units 1 and 2. 9

Q. DO YOU ALSO HAVE A PROPOSED ADJUSTMENT TO THE BRIDGER UNIT 10 1 HEAT RATE INCLUDED IN THE GRID MODEL? 11

A. Yes. PacifiCorp uses actual results from the most recently available 48 months to develop 12

a scalar adjustment to the design heat rate for use in GRID. PacifiCorp described the 13

necessity for this adjustment to design heat rates in response to ICNU Data Request 2.1 in 14

docket UE 264. The full response is attached as Exhibit ICNU/102, Deen/6: 15

The heat rate coefficient scalar is necessary because online net 16 generation heat rates can change over time, depending on a unit’s 17 age, operating time since overhaul, and changes in auxiliary loads 18 (such as coal mills and scrubbers). The design heat rate 19 coefficients capture the variance in heat rate as a function of unit 20 output, but cannot capture the complex relationship of these other 21 factors. 22

The use of the 48 month data does not allow for the timely integration of capital 23

improvements that effectively raise the design heat rates. As described previously, the 24

heat rate for Bridger Unit 1 showed substantial improvement in efficiency after May 25

2010. However, under PacifiCorp’s method, customers do not see the full benefit of that 26

improvement because using the date from the months back to July 2008 dilutes the 27

Page 7: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/6

improvement. Indeed, customers will not see the full improvement due to the turbine 1

upgrade put in service during 2010 until 2015, all the while paying the costs through 2

rates. 3

Q. WHAT HEAT RATE DO YOU RECOMMEND BE USED FOR THE BRIDGER 1 4 UNIT? 5

A. I recommend that the average heat rate of BTU/kWh derived from July 2010 6

through June 2012 be used in GRID modeling for this case. This will allow customers to 7

receive the full benefits of capacity projects they are paying for through rates. 8

Q. ARE THERE ANY OTHER ERRORS IN PACIFICORP’S HEAT RATE 9 CALCULATIONS? 10

A. Yes. As described in response to ICNU Data Request 2.1 in UE 264, PacifiCorp 11

inadvertently did not include all 48 months of operating data for its thermal plants while 12

calculating the heat rate coefficients for use in GRID. PacifiCorp intends to correct this 13

error for all thermal plants in its next update filing. The overall system impact of this 14

correction is approximately $3.7 million. 15

Q. HAVE YOU CALCULATED THE COMBINED EFFECT OF YOUR ADJUSTED 16 HEAT RATES ON NPC FOR THE RATE PERIOD? 17

A. Yes. Correcting both the Bridger Unit 1 and 2 heat rates to reflect the efficiency 18

improvements from the turbine upgrade projects reduces the Oregon revenue requirement 19

by $1.2 million. This adjustment represents the incremental NPC change in GRID after 20

correcting for the heat rate calculation error PacifiCorp acknowledged in response to 21

ICNU Data Request 2.1. 22

Page 8: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/7

III. COAL FUEL EXPENSE 1

Q. PLEASE SUMMARIZE THE COAL SUPPLY FOR THE JIM BRIDGER PLANT. 2

A. The Company supplies approximately two thirds of its fuel needs for the Jim Bridger 3

Plant from the affiliated BCC facilities. The remaining amounts are supplied from the 4

third-party Black Butte coal contract. 5

Q. DID THE COMPANY COMPARE THE COSTS OF COAL FROM THE 6 AFFILIATED BCC MINES AND THE THIRD PARTY BLACK BUTTE 7 SUPPLY? 8

A. Yes. On page 15, lines 16-18 of PAC/200, the Company asserts that the prices from the 9

BCC mines and the Black Butte third party supply are comparable. The Company’s 10

analysis is that the BCC costs for 2014 are per ton and prices under the Black 11

Butte Contract are per ton. 12

Q. IS THE COMPANY’S COMPARISON BETWEEN THE AFFILIATE AND 13 THIRD PARTY PRICES APPROPRIATE? 14

A. No. There are two significant problems with the Company’s analysis. First, the 15

Company’s analysis does not include the cost of the allowed return on investment for the 16

affiliated coal supply. In response to ICNU Data Request 1.12 in Docket No. UE 264, 17

the Company provided the following: 18

The cost of coal produced by Bridger Coal Company (BCC), as 19 reflected in the Company’s TAM filing, includes only production 20 costs. Return on investment is not reflected in the cost of fuel in 21 the TAM. Instead, the Company's general rate case filing includes 22 a normalizing adjustment (Page 8.3 of Exhibit PAC/1002 from UE 23 263) which adds the net plant investment associated with BCC to 24 rate base. 25

ICNU/102, Deen/4. 26

Not including the investment costs associated with the BCC mine, significantly 27

understates the actual cost of the fuel and leads to an inaccurate comparison. Including 28

Page 9: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/8

the investment costs shows the true costs of the BCC fuel to be per ton, an 1

increase of per ton or about over the value reported by PacifiCorp. 2

Q. WHAT IS THE OTHER ISSUE WITH PACIFICORP’S COMPARISON OF THE 3 COSTS OF THE BCC AND BLACK BUTTE COAL SUPPLIES? 4

A. In addition to the price per ton, the heat content of the coal from the two sources is also 5

different. For an accurate comparison, the sources must also be made equivalent on this 6

basis. Black Butte contract coal has an assumed heat content of BTU/lb and the 7

BCC coal has an average assumed heat rate of BTU/lb. Thus, in addition to being 8

less expensive per ton, the Black Butte coal also provides more energy per unit. 9

Q. TAKING INTO ACCOUNT BOTH OF THESE FACTORS, WHAT IS THE 10 COMPARISON BETWEEN THE BCC AND BLACK BUTTE COAL COSTS? 11

A. Taking into account both the differential heat rates and the full costs of the BCC coal, the 12

difference in cost between the affiliated mine and third party supply is quite significant. 13

Specifically, the coal supplied by the BCC mines costs approximately per MMBTU 14

while coal supplied from the Black Butte contract costs per MMBTU. This 15

constitutes a difference of over much larger than the difference of only 16

represented by PacifiCorp in its testimony. 17

Q. HOW IS THIS DIFFERENCE RELEVANT FOR RATEMAKING PURPOSES? 18

A. The Oregon Administrative Rules provide that for a utility’s affiliate supply of fuel, rate 19

payers should receive the lower of either the affiliate’s cost or market rates. OAR 860-20

027-0048. This is also referred to as the Commission’s Transfer Pricing Policy. 21

Page 10: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/9

Q. WHAT IS THE SPECIFIC RULE SUPPORTING THE TRANSER PRICING 1 POLICY REGARDING TRANSACTIONS BETWEEN A UTILITY AND ITS 2 AFFILIATED INTERESTS? 3

A. OAR 860-027-0048, Allocation of Costs by an Energy Utility, affirms the Commission’s 4

Transfer Pricing Policy. Section 4(e) of the rule states: 5

When services or supplies (except for generation) are sold to an 6 energy utility by an affiliate, sales shall be recorded in the energy 7 utility’s accounts at the approved rate if an applicable rate is on file 8 with the Commission or with FERC. If services or supplies (except 9 for generation) are not sold pursuant to an approved rate, sales 10 shall be recorded in the energy utility’s accounts at the affiliate's 11 cost or the market rate, whichever is lower. 12

Thus, supplies that are not under an approved rate shall be recorded in the utility’s 13

accounts at the lower of the affiliate’s cost or the market rate. In this case, this pricing 14

policy applies to coal supply from the affiliate mines of the BCC which supplies coal to 15

the Jim Bridger coal generating facility. 16

Q. DOES THE BLACK BUTTE CONTRACT REPRESENT A REASONABLE 17 VALUE FOR THE LESSER OF COMPARISON BETWEEN AFFILIATE 18 SUPPLY COSTS AND MARKET COSTS? 19

A. Yes. The Black Butte contract is a third party supply contract for coal supply at Jim 20

Bridger plant that PacifiCorp obtained through solicitation of the market. Also, the 21

contract is not fixed price but rather its components are escalated annually by a series of 22

third-party cost indices. Thus, the contract price for 2014 will represent a fair and current 23

market value for the year. 24

Page 11: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/10

Q. WHAT SPECIFIC ADJUSTMENT DO YOU RECOMMEND GIVEN THE 1 LOWER PRICE OF MARKET COAL SUPPLY RELATIVE TO THE 2 AFFILIATED COSTS OF COAL FOR THE JIM BRIDGER FACILITY? 3

A. To comply with OAR 860-027-0048, I recommend that the coal supply for the Jim 4

Bridger plant in 2014 be priced at the cost of the Black Butte contract coal supply of 5

per MMBTU. 6

Q. HAVE YOU CONDUCTED A GRID MODEL STUDY INCORPORATING THIS 7 PRICE CHANGE? 8

A. Yes. Using the market-based Black Butte contract price for the Jim Bridger coal cost 9

reduces the Oregon revenue requirement by approximately $7.4 million. 10

IV. WIND ENERGY SHAPING 11

Q. HAS THE COMPANY MADE ANY CHANGES TO ITS WIND ENERGY 12 FORECAST IN THIS CASE? 13

A. Yes. Previously the Company has developed its wind energy forecast for GRID based on 14

a median energy, or “P50”, forecast intended to have an equal probability of over or 15

under forecasting wind output in a given year. The Company then input expected wind 16

generation to GRID using this forecast divided into six four-hour blocks. 17

In this case, the Company has used the same energy forecast, but has used 2011 18

energy output data from its owned and purchased wind facilities to shape the hourly wind 19

output in GRID to create a more variable hourly wind shape in the model. 20

Q. IS THIS CHANGE APPROPRIATE? 21

A. No. There are two problems with this proposed change. First, using a single year of 22

actual wind output data for purposes of modeling is inherently problematic. Wind energy 23

resources display a high level of inter-annual variability in output. For example, a recent 24

technical report titled “Long-Term Wind Power Variability” published by the National 25

Page 12: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/100 Deen/11

Renewable Energy Laboratory, a national lab of the Department of Energy, concluded 1

that the variation in production at wind power plants between years was most comparable 2

to run-of-river hydro.1

Second, the Company has not shown that the previous GRID modeling method of 5

four-hour blocks, combined with the Company’s wind integration costs included in 6

GRID, does not fully account for the costs of dealing with the variable output of wind 7

resources. Indeed, the Company has already made extensive modeling efforts in 8

forecasting its NPC to this effect based on its 2012 Wind Study including setting reserve 9

requirements in GRID and including post-hoc inter-hour integration costs for wind 10

output. 11

/ Modeling of hydro variability typically takes into account ten 3

years or more of operational experience. 4

Q. WHAT IS THE EFFECT OF REMOVING THE COMPANY’S PROPOSED 12

CHANGE? 13

A. The effect of removing PacifiCorp’s proposed change is to reduce the Oregon revenue 14

requirement by approximately $1.2 million. 15

Q. DOES THIS CONCLUDE YOUR TESTIMONY? 16

A. Yes. 17

1/ Long-Term Wind Power Variability. Y. H. Wan. Technical Report, NREL/TP-5500-53637. Retrieved

online at http://www.nrel.gov/docs/fy12osti/53637.pdf

Page 13: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

BEFORE THE OREGON PUBLIC UTILITY COMMISSION

UE 264

EXHIBIT ICNU/101

QUALIFICATIONS OF MICHAEL C. DEEN

June 4, 2013

In the Matter of PACIFICORP 2014 Transmission Adjustment Mechanism _______________________________

) ) ) ) ) )

Page 14: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

QUALIFICATION STATEMENT OF 1

Michael Deen 2

Q. PLEASE STATE YOUR NAME, EMPLOYER, AND BUSINESS ADDRESS. 3

A. My name is Michael C. Deen, and my business address is 900 Washington Street, Suite 4

780, Vancouver, Washington 98660. I am employed by Regulatory and Cogeneration 5

Services, Inc. (“RCS”), a utility rate and consulting firm. 6

Q. IN WHAT CAPACITY ARE YOU EMPLOYED? 7

A. I am a consultant for the Industrial Customers of Northwest Utilities (“ICNU”) and other 8

consumers. ICNU is a non-profit trade association whose members are large industrial 9

customers served by electric utilities throughout the Pacific Northwest, including 10

PacifiCorp. 11

Q. PLEASE STATE YOUR EDUCATIONAL BACKGROUND. 12

A. I received a B.A. in Psychology from Reed College in May 2006. I have completed 13

coursework in statistics, data analysis, research design, and economics. 14

Q. PLEASE SUMMARIZE YOUR PROFESSIONAL EXPERIENCE. 15

A. After graduating from Reed, I was employed as a Research Analyst at McCullough 16

Research, a consulting firm in Portland, Oregon specializing in energy policy and 17

litigation support. While at McCullough Research, my duties included the modeling and 18

analysis of both Western and national energy markets. I also provided analysis for use in 19

several proceedings surrounding Enron’s role in the Western Energy Crisis of 2000-2001. 20

From November 2007, through July 2011, I was employed as a policy analyst at 21

the Public Power Council (“PPC”). PPC is a non-profit trade association representing the 22

ICNU/101 Deen/1

Page 15: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

interests of consumer-owned utilities buying wholesale power and transmission services 1

from the Bonneville Power Administration (“BPA”). At PPC, I worked extensively on 2

computer modeling relating to the Residential Exchange Program and other BPA rate 3

issues. I also provided analysis and commentary for PPC in a variety of BPA processes. 4

I also was involved in modeling efforts surrounding the potential economic impacts of 5

various greenhouse gas mitigation proposals on Western electricity markets. 6

Since joining RCS in July 2011 I have served as an analyst and expert witness on 7

a variety of power supply, cost, ratemaking, and policy topics primarily regarding the 8

Bonneville Power Administration (“BPA”) and Pacific Northwest utilities. 9

Q. PLEASE STATE YOUR EXPERIENCE AS A WITNESS IN PREVIOUS 10 PROCEEDINGS. 11

A. I have previously testified in the BPA WP-07 Supplemental, WP-10, TR-10, BP-12 and 12

REP-12 rate proceedings. I have also testified on behalf of ICNU before the Washington 13

Utilities and Transportation Commission in proceedings regarding Puget Sound Energy, 14

PacifiCorp, and Avista as well as before the Oregon Public Utility Commission in 15

proceedings regarding Portland General Electric and PacifiCorp. Lastly, I have also 16

testified as an expert on behalf of the Northwest Industrial Gas Users (“NWIGU”) in 17

proceedings related to Avista regarding natural gas issues. 18

Q. DOES THIS CONCLUDE THIS TESTIMONY? 19

A. Yes. 20

ICNU/101 Deen/2

Page 16: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

BEFORE THE OREGON PUBLIC UTILITY COMMISSION

UE 264

EXHIBIT ICNU/102

EXCERPTS OF PACIFICORP’S RESPONSES TO ICNU DATA REQUESTS 2.1 AND 2.3 (UE 263)

PACIFICORP’S RESPONSES TO ICNU DATA REQUESTS 1.12 and 2.1 (UE 264)

REDACTED VERSION

JUNE 4, 2013

In the Matter of PACIFICORP 2014 Transmission Adjustment Mechanism _______________________________

) ) ) ) ) )

Page 17: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/102 Deen/1

Page 18: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/102 Deen/2

Page 19: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/102 Deen/3

Page 20: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/102 Deen/4

Page 21: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/102 Deen/5

Page 22: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

Redacted ICNU/102 Deen/6

Page 23: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

TEL (503) 241-7242 ● FAX (503) 241-8160 ● [email protected]

Suite 400 333 SW Taylor

Portland, OR 97204

June 4, 2013 Via Electronic Mail and Federal Express Public Utility Commission of Oregon Attn: Filing Center 550 Capitol St. NE #215 P.O. Box 2148 Salem OR 97308-2148

Re: In the Matter of PACIFICORP 2014 Transition Adjustment Mechanism Docket No. UE 264

Dear Filing Center: Enclosed for filing in the above-referenced docket, please find the original and five (5) copies of the Confidential Responsive Testimony and Exhibits of Michael C. Deen on behalf of the Industrial Customers of Northwest Utilities, and the original and five (5) copies of the redacted version of same.

Thank you for your assistance, and please do not hesitate to contact our office with any questions.

Sincerely, UU

/s/ Jesse Gorsuch Jesse Gorsuch

Enclosures cc: Service List

Page 24: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

PAGE 1 – CERTIFICATE OF SERVICE

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that I have this day served the foregoing documents upon

all parties in this proceeding by causing the same to be sent via electronic mail to each

individual’s last-known email address, as listed below.

Dated at Portland, Oregon, this 4th day of June, 2013.

Sincerely, UU/s/ Jesse Gorsuch Jesse Gorsuch

(W) PACIFIC POWER SARAH WALLACE SENIOR COUNSEL 825 NE MULTNOMAH STE 1800 PORTLAND OR 97232 [email protected]

(W) PUBLIC UTILITY COMMISSION OF OREGON JOHN CRIDER PO BOX 2148 SALEM OR 97308-2148 [email protected]

(W) PACIFICORP, DBA PACIFIC POWER OREGON DOCKETS 825 NE MULTNOMAH ST, STE 2000 PORTLAND OR 97232 [email protected] (W) WAL-MART STORES, INC. STEVE W CHRISS 2001 SE 10TH ST. BENTONVILLE AR 72716-0550

(W) CITIZENS' UTILITY BOARD OF OREGON OPUC DOCKETS ROBERT JENKS G. CATRIONA MCCRACKEN 610 SW BROADWAY, STE 400 PORTLAND OR 97205 [email protected] [email protected] [email protected]

(W) PUC STAFF – DEPARTMENT OF JUSTICE MICHAEL WEIRICH BUSINESS ACTIVITIES SECTION 1162 COURT ST NE SALEM OR 97301-4096 [email protected]

(W) ENERGY STRATEGIES LLC KEVIN HIGGINS 215 STATE ST - STE 200 SALT LAKE CITY UT 84111-2322 [email protected]

(W) MCDOWELL RACKNER & GIBSON PC KATHERINE MCDOWELL 419 SW 11TH AVE., SUITE 400 PORTLAND OR 97205 [email protected]

(W) NOBLE AMERICAS ENERGY SOLUTIONS, LLC GREG BASS 401 WEST A ST., STE. 500 SAN DIEGO CA 92101 [email protected]

Page 25: BEFORE THE OREGON PUBLIC UTILITY COMMISSION UE 264 · 2013. 6. 7. · before the oregon public utility commission . ue 264 . responsive testimony of michael c. deen . on behalf of

PAGE 2 – CERTIFICATE OF SERVICE

(W) RICHARDSON & O’LEARY GREGORY M ADAMS PO BOX 7218 BOISE ID 83702 [email protected]

(W) SAFEWAY INC. LISSA MALDONADO GEORGE WAIDELICH 5918 STONERIDGE MALL ROAD PLEASANTON OR 94588-3229 [email protected] [email protected]

(W) REGULATORY & COGENERATION (W) PORTLAND GENERAL ELECTRIC SERVICES INC DOUGLAS C. TINGEY DONALD W. SCHOENBECK 121 SW SALMON 1WTC13 900 WASHINGTON ST, STE PORTLAND OR 97204 VANCOUVER WA 98660-3455 [email protected] [email protected] (W) PORTLAND GENERAL ELECTRIC SERVICES INC JAY TINKER 121 SW SALMON 1WTC13 PORTLAND OR 97204 [email protected]